Revisiting the Department of Defense SBIR Fast Track Initiative (2009) / Chapter Skim
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2 Survey Analysis
2 Survey Analysis
Pages 28-73
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Firms with multiple awards received more than one project survey. As a result, there are more project surveys than firm surveys.
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Rate (%) Fast Track 156 61 50 23 32 Phase II 198 12 69 33 35 Enhancement Both Fast 32 2 14 41 44 Track and Phase II Enhancment Control 331 45 107 28 32 Group SOURCE: NRC Project Survey 2006.
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Research by Link and Scott demonstrates that the probability of obtaining research project information by survey decreases for less recently funded projects and it increased the greater the award amount.b Nearly 40 percent of respondents in the NRC Project Survey began Phase I efforts after 1998, partly because the number of Phase I awards increased, starting in the mid 1990s, and partly because winners from more distant years are harder to reach. They are harder to reach as time goes on because small businesses regularly cease operations, are acquired, merge, or lose staff with knowledge of SBIR awards.
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o Commercialization lag. While the NRC Project Survey broke new ground in data collection, the amount of sales made -- and indeed the number of projects that generate sales -- are inevitably undercounted in a snapshot survey taken at a single point in time.
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7 See Figure 2-2, NRC Project Survey 2006, Question 16, Appendix C
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Both received more funding than the control group, PIIE firms considerably more. 8 See Table App-A-3 in Appendix A 9 See Figure 2-4, NRC Project Survey 2006, Question 19, Appendix C
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.18 15 See Figure 2-5, NRC Project Survey 2006, Question 16b. See Appendix C
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Similarly, 65 percent of PIIE project revenues were from DoD and the primes. Direct sales to DoD in this case accounted for about 45 percent of the total.23 19 See NRC Project Survey 2006, Question 9.
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See Appendix C 26 See NRC Project Survey 2006, Question 23.
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30 Ibid. 31 See NRC Project Survey 2006, Question 31.
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33 See NRC Project Survey 2006, Question 33. See Appendix C
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SOURCE: NRC Project Survey 2006, Question 1. See Appendix C
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Twenty-four percent of the Phase II Enhancement reported five or fewer and 36 percent of the firms responding for control group awards who reported five or fewer employees.40 • Forty-three percent of the Phase II Enhancement awards reported a firm size of more than 20 employees at the time of award, compared with 41 percent for the control group.41 • For Phase II Enhancement the median founding date was 1990. Only 37 percent of the firms responding for Phase II Enhancement reported a founding date after 1992.
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Nine percent of the Fast Track surveys reported that the firm had received more than five Phase I awards prior to the surveyed Fast Track Phase I four times as many projects in the control group reported that they had received more than five Phase I awards prior to the surveyed Phase I.43 Only 36 percent of Fast Track responses reported a prior Phase II and only six percent reported receiving more than five prior Phase II awards.44 The high percentage of Fast Track awards to firms who had no prior Phase II is not surprising.
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The percentage of Control Group firms reporting fewer than five employees has declined from 36 percent to 21 percent.48 Had no prior 100 Phase II awards Percent of Respondents 90 Had 1-5 prior 80 Phase II awards 70 Had more than 5 60 Phase II awards 50 40 30 20 10 0 Fast Track Phase II Control Group Enhancement FIGURE 2-4 Prior Phase II experience:2-4.epsof prior Phase II awards. Figure Number SOURCE: NRC Project Survey 2006, Question 19.
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. The number of PIIE firms reporting fewer than five employees has declined from 24 percent to 11 percent.49 PIIE firms now have a bigger share of large firms (more than 50 employees)
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Legislation focused on encouraging participation and dissemination of information. PL 102-564 states as a purpose "to improve the Federal Governments dissemination of information concerning the small business innovation research program, particularly with regard to program participation by woman-owned small business concerns and by socially and economically disadvantaged small business concerns."
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It then analyzed survey response in light of those data.
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Ownership is not the only means of participation in SBIR. The current survey also examined the Phase III performance of projects where women and minorities had the opportunity to serve as Principal Investigators (PI)
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Figure 2-7.eps 54 DoD SBIR Submissions Database cross-referenced with NRC Project Survey 2006, Question 17.
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Sixteen of the 84 Project Survey respondents who said that they definitely would not have undertaken the work in the absence of SBIR, reported sales of more than $1 million resulting from the SBIR effort.55 55 Cross-reference of individual survey responses to NRC Project Survey 2006, Questions 9a and 13. See Appendix C
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Forty-seven percent of 56 See NRC Project Survey 2006, Question 15. See Appendix C
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SOURCE: NRC Project Survey Figure 2-9.epsSee Appendix C 2006, Question 4.
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61 Ibid. 62 See NRC Project Survey 2006, Question 4, in Appendix C
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sales by 2-11.eps SOURCE: NRC Project Survey 2006, Question 4. See Appendix C
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Export markets 100 Other 90 Percent of Respondents State or local 80 governments 70 Other agencies 60 50 NASA 40 Prime contractors 30 for DoD 20 DoD 10 Domestic private 0 sector Fast Track Phase II Control Group Enhancement FIGURE 2-13 Distribution of Figure 2-10.eps III sales going to each sales: Percent of Phase sector. and also SOURCE: NRC Project Survey 2006, Question 4.
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cit. 69 NRC Project Survey 2006, Question 4.
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Figure 2-14.eps SOURCE: NRC Project Survey 2006, Question 9. See Appendix C
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See Appendix B 72 See NRC Project Survey 2006, Question 9.
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For the Control group, 33 projects reported no gap in funding, resulting in an average gap for all Control group respondents of six months.77 Responses to the gap by firms in each of the three groups are shown in Figure 2-17. 75 See NRC Project Survey 2006, Question 31, in Appendix C
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SOURCE: NRC Project Survey 2006, Question 31. See Appendix C
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79 NRC Project Survey 2006, Question 32. See Appendix C
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Half of the proposals were reported to have been submitted after Phase I was completed. This self imposed funding gap appeared to range from 197 days for Phase II-Enhancement proposals to 232 days for the Control group.
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Figure 2-18.eps SOURCE: NRC Project Survey 2006, Question 23. See Appendix C
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Fast Track Fast Track awards reported an average Phase II SBIR award that is $100,000 higher than the control group.85 84 The 2005 survey for the NRC study found that 920 responding DoD projects awarded Phase II from 1992 to 2001 averaged $795,734 in additional non-SBIR developmental funding, a larger average than the control group, but below that of Fast Track in the current survey (NRC Project Survey 2006, Question 23, in Appendix C)
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Since almost two-thirds of Fast Track respondents said this was their first Phase II, the average third-party match would be 1/3 x $800k +2/3 x $200k = $400k; however, almost one fourth of the Fast Track also received Phase II Enhancements, raising this average for third-party funding to about one half million dollars. Continuing this logic, one fifth of the Phase II Enhancement respondents were also Fast Track awards, hence the full average thirdparty funding for Phase II Enhancement awards was also almost a half million dollars.
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89 NRC Project Survey 2006, Question 18. See Appendix C
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2.2.8 Impact of the Use of Fast Track and Phase II Enhancement on Responding Awards Respondents were asked several questions that were answered only by Fast Track awards or only by Phase II Enhancement Awards. The first question dealt with the source of matching funds in the Fast Track proposal or in the Phase II Enhancement proposal.
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SOURCE: NRC Project Survey 2006, Question 25. See Appendix C
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Similarly, 72 percent of the Fast Track projects that reported 93 NRC Project Survey 2006, Question 26. See Appendix C
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See Appendix C investment by a federal agency as their source of matching funds also reported improved transition.97 2.2.8.4 Satisfaction with Fast Track and the Phase II Enhancement Figure 2-23 shows the bottom line satisfaction by the firms with both the Fast Track program and the Phase II Enhancement program.
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98 The project survey is not the basis for categorizing a firm as belonging to Fast Track, Phase II Enhancement, or control groups. This is because a given firm (1)
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Forty-six percent of all respondents said that they were likely to submit future Phase II Enhancement proposals; eight percent said that they were 100 Although Fast Track Phase II proposals are not due for six or more months (component dependent) after the Phase I award, Fast Track applications are due 150 days after the Phase I award.
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who identified difficulty in obtaining acquisition program funding also identified difficulty in obtaining private sector funding. For firms reporting "other," the most frequent response (over half of the 32 firms who responded "other")
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See Appendix B Merger negotiations 40 Partial sale negotiations 35 Percent of Phase II Reporting Sale negotiations 30 Finalized merger 25 Finalized partial sale Finalized sale 20 15 10 5 0 Fast Track Phase II Control Group Enhancement FIGURE 2-26 Dilution of firm ownership SOURCE: NRC Project SurveyFigure 2-26.eps See Appendix C
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But they may also be increasing the ultimate gain from the innovation by infusing cash and business expertise at the critical point in development. Fourteen percent of the Fast Track awards have resulted in finalized agreements for sale of ownership, partial sale of ownership, or merger.
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